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Subsidy Removal: NLC Begins strike Wednesday, TUC dithers

As Nigerians continue to writhe in agony over the fuel subsidy removal by the Federal Government, which resulted in over 200 per cent hike in the pump price of petrol, the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), yesterday, differed on whether to proceed on strike over the development in the coming days or not.

While the NLC announced plans to down tools from Wednesday next week if the pump price is not reversed, the TUC puts its decision on the matter on hold till after tomorrow’s meeting with the Federal Government’s team.

This was even as the Progressive Governors’ Forum (PGF), also yesterday, threw its weight behind the Federal Government’s decision.

Speaking after a meeting in Abuja, yesterday, the NLC berated the Nigerian National Petroleum Company Limited (NNPCL) for jerking up the price unilaterally.

The president of the union, Joe Ajaero, said that the organised labour would have no choice but to withdraw their services if the increment in prices is not reversed before next week Tuesday.

The NNPCL last Wednesday jerked up the pump price of PMS by over 220 per cent bringing it to between N488 and N557 per litre nationwide.

To ensure a smooth strike nationwide, the NLC hinted that it has begun mobilisation of 48 affiliate unions, as well as its 36 state councils including Abuja.

To this end, the aviation space would be shut down on Tuesday night, and the export terminal of upstream operations would also be shut down by PENGASSAN, while NUPENG would ground petrol tankers around the country.

Motor parks would not function as members of NURTW are expected to withdraw their services as well.

To achieve total compliance, the NLC directed its affiliates to commence mobilisation immediately ahead of the planned nationwide protest.

Ajaero said: “The NLC decided that if by Wednesday next week the NNPCL, a private limited liability company that illegally announced a price regime in the oil sector refuses to reverse itself for negotiation to continue, the NLC and all its affiliates will withdraw their services and commence protests nationwide until this is complied with.

“The NNPCL doesn’t have the monopoly to act illegally even as a private company. The NLC NEC, therefore, directs all state councils and all industrial unions to commence mobilisation from this moment to make sure that this action is enforced. The action has commenced immediately.”

The labour leader who accused the NNPCL of refusing to disclose beneficiaries of subsidy and landing cost of petroleum products also urged the NNPCL to ensure a proper account of the amount of petroleum products Nigerians consume daily.

“The NLC is calling for a thorough probe in the process of subsidy to know those involved and the amount involved. Investigate it properly before it is swept under the carpet. The current attempt to sweep the fraudulent practices in the subsidy regime should not be tolerated by all well-meaning Nigerians,” he added.

The President of the TUC, Festus Osifo, who also spoke yesterday in Abuja after the group’s emergency National Executive Council (NEC) meeting, explained that while it condemns the unilateral decision of the NNPCL to increase fuel prices, the National Administrative Council (NAC) of TUC has been empowered to unveil its Charter of Demands to the Federal Government’s team at tomorrow’s meeting.

He informed that its next move depends on the outcome of the meeting while declining to reveal the items that are encapsulated in the Charter of Demands.

He added: “During our last meeting, we were asked to submit our list of demand to the government team, but we said such a list can only be made by our relevant organs. This was after the government team had listed several things that would be done to ameliorate the sufferings that will be brought on the people by the subsidy removal. This is why we called this meeting to deliberate on our demands. The requests are ready and will be made known to the government team on Sunday. It is the outcome of the meeting that will determine our next line of action.”

State governors elected on the platform of the ruling All Progressives Congress (APC), were in the Presidential Villa, Abuja, where they expressed support for the subsidy removal by President Tinubu at his inauguration, last Monday.

The governors, however, expressed concern over the sudden hike in petrol prices following the president’s inaugural speech.

Speaking with newsmen after meeting with Tinubu, Chairman of the PGF and governor of Imo State, Hope Uzodinma, condemned the price increase on what he described as “old stock” and called on Nigerians to rally behind the government’s decision to remove the subsidy.
Reiterating the PGF’s support for the removal of subsidy on petrol, Uzodinma said that the decision for fuel subsidy removal was reached by the administration of President Muhammadu Buhari, under the National Economic Council (NEC), led by former Vice President Yemi Osinbajo, when it became apparent that it was no longer possible to fund subsidy.

“There will be new economic realities and once a new policy comes, there’s usually this panic. For instance, from May 29 till today, I’m not aware that any petroleum marketer has imported any product. All the products in their storage facilities are those already imported, and subsidised by the Federal Government. Why the rush to increase the prices? It is man’s inhumanity to man,” he said.

He spoke while responding to a question on what the states were going to do to ameliorate the suffering of Nigerians in the face of current realities,

“I think that what we should do is to be our brother’s keepers and learn how to save the firewood we got during the dry season, so we can use it during the rainy season. But I think also that as we work towards improving the economy of this country, with the intention of creating prosperity, the government will be reasonable enough to look at the reality on the ground and address them as appropriate. I do not doubt in my mind that the man who has raised his pump price from N300 plus to N500 plus is creating a panic that there will be no product, but I’m also aware that genuine investors and private people are now working hard toward making sure…”

The PGF chair assured that the situation would be better when Dangote Refinery begins production next month.

He said: “By next month, July, the Dangote Refinery will be on stream and it’s a very big refinery that will make products available. You are aware that the Federal Government awarded turnaround maintenance contracts for Port Harcourt, Kaduna, and Warri refineries. So, if within the period, these refineries are working, products will be available and the market forces will come into play.

“Let us create competition in the market; there is no how any reasonable mind will encourage monopoly, anywhere in the world. Let the forces of the market determine prices; let demand and supply be at play. So those are the things I think we should do.

“For our workers, I know the president we have. You know he was the first person to increase salaries in Lagos, so he will not be insensitive to the time and experiences of federal civil servants. But we need to encourage investments; we need to allow businesses to boom. We need to stimulate economic activities in a manner that prosperity will be the name of the business.”

A member of the Governing Board of the Niger Delta Development Commission (NDDC), Olorogun Bernard Okumagba, also threw his weight behind the removal of the petrol subsidy, saying that it is in Nigeria’s interest.

He appealed to all Nigerians to support President Tinubu’s commitment to rebuilding the nation’s economy for the benefit of all Nigerians.

In a statement yesterday, Okumagba, a former Commissioner for Finance in Delta State, lauded the president for phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.

“Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care, and jobs that will materially improve the lives of millions,” he said.

However, the Head of Transparency International-Nigeria and the Executive Director Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, has called on the Federal Government to end subsidy fraud by fixing the local refineries and, by extension, prevent avoidable corruption, wastage, and oil theft that have continued to stymie the nation’s economy.
He noted that the solution to the problem of subsidy is local refining of products, which will drive down the cost of the product and end corruption associated with the present subsidy regime.

Rafsanjani also called on the president to immediately address Nigerians on proposed measures and plans for the removal, including mainstreaming the concerns of civil servants and other Nigerians who earn minimum wage.

In a chat with The Guardian yesterday in Abuja, Rafsanjani stated that the fuel subsidy regime in Nigeria has been rife with elite manipulations and intrigues, adding that no administration has been able to give Nigerians the true picture of what happens in NNPC.

He explained that the present subsidy removal is part of what is contained in the Petroleum Industry Act (PIA), but there has been an erosion of trust from the people who need the assurance of a credible plan to assuage their pains.

Rafsanjani pointed out that some form of social protection should have been launched immediately to protect the most vulnerable.

He noted that given the purchasing capacity of common Nigerians and the rising inflation level that has rendered the majority of households incapacitated to afford basic goods and services, adequate and sustainable measures must be instituted by the Federal Government to mitigate the impact of the removal.

Meanwhile, the Federal Government, yesterday, in Abuja announced an end to the equalisation of petroleum products nearly 48 years after the scheme was created through Decree Number Nine.

In light of the removal of subsidy on petrol, which was the last of the products being equalised in the country, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said the scheme has ceased to exist.

NMDPRA Chief Executive, Farouk Ahmed, also said that the regulator would no longer fix prices or release templates for petrol prices.

Following incidences of long queues experienced nationwide due to frequent shortages of petroleum products in 1974 and 1975, the Federal Government had through the decree promulgated in 1975, introduced equalisation scheme to unify prices of petroleum products across the country.
The scheme is usually paid for, by every consumer as the fund is calculated to make the eventual pump price of PMS.

Ahmed said that under the liberalised market, market forces are allowed to dictate prices.
“We put the regulation in place, we make sure quality control is complied with; we make sure the product is there and we give licence to a prospective importer. The market is now open for everybody that wants to import as far as they meet all the requirements. So, it is not about the NNPC alone. For everybody in the sector, we make sure that we guide their operations whether at the depot or wherever the product is but we will not put a cap to say this is what the price must be. As far as we are concerned in the NMDPRA, this is not like before when the PPPRA fixes the price. In a deregulated market, it is the market force that dictates the price,” he said.

Ahmed explained that the NNPCL’s role is to fix the prices of the petrol it imported and not take over the responsibilities of the authority.

“In the case of the NNPC, the organisation is the sole importer at this point. We told the NNPC to recover its costs because it knows how much it cost the NNPCL to import the product and sell it. Of course, we also know how much shipping, offshore, ex-depot, and ex-pump are, but we cannot tell it to sell at a price because the market is deregulated,” he said.

Ahmed stated that the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC) would aggressively monitor activities in the downstream sector to prevent profiteering by petroleum marketers.

He noted further that marketers are now free to source their foreign exchange anywhere around the world to import petroleum products and then recover their costs without impediments.

On where the importers would source forex from, Farouk said: “The CBN will not give a dollar to anyone because it is an open market. Anyone willing to import should get the dollars from anywhere to import. Anyone willing to open a letter of credit from any part of the world can do that to import. That marketers can source their forex from anywhere is the beauty of the liberalised market that the NMDPRA has introduced based on the provision of the law.”
“This means that the price will no longer be static. It will depend on the international price of the gasoline market. But this does not imply that marketers can sell at any price. If we find that certain prices are way above the expected profit margin, we and the FCCPC can move in to curb such excesses because that will be profiteering. The market structure will dictate the price swings at every point in time.”

According to him, the Dangote Refinery will give Nigeria easy access to petroleum products on-land for security reasons because it is within the Nigerian territory. “Secondly, it will increase employment for our professionals,” he said, adding, “I don’t think products will be cheaper because the company will be buying crude oil at an international price. However, it is going to be cheaper in terms of freight rate.”
Be that as it may, the Lagos State government has urged residents to stop patronising black marketers, saying with the new regime on petrol, market forces would determine the prices.

Lagos State Deputy Governor, Dr. Obafemi Hamzat, spoke yesterday during an on-the-spot assessment of some filling stations in the Ikoyi area of the State.

Speaking to journalists during the exercise, Hamzat said there was no need for panic buying and hoarding of fuel as marketers have assured the government of the availability of fuel in the state.

He noted that the essence of the tour was to go around and see the situation of things, noting that the challenge is not the scarcity of fuel, but the price that has increased.

Hamzat implored Nigerians to embrace deregulation, adding that the advantage of the subsidy removal outweighs its effects.

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